ermine whether each of the following is direct financing or indirect financing.(2 points)

Question

selling stock on the stock market

Direct Financing
Direct Financing – selling stock on the stock market

Indirect Financing
Indirect Financing – selling stock on the stock market
taking out a loan at a commercial bank

Direct Financing
Direct Financing – taking out a loan at a commercial bank

Indirect Financing
Indirect Financing – taking out a loan at a commercial bank
lending money to a friend to start a business

Direct Financing
Direct Financing – lending money to a friend to start a business

Indirect Financing
Indirect Financing – lending money to a friend to start a business
selling bonds on the capital market

Direct Financing
Direct Financing – selling bonds on the capital market

Indirect Financing
Indirect Financing – selling bonds on the capital market

Answer 1

The correct classification for each case would be:

- Selling stock on the stock market: Direct Financing
- Taking out a loan at a commercial bank: Indirect Financing
- Lending money to a friend to start a business: Indirect Financing
- Selling bonds on the capital market: Direct Financing